The CMC Altcoin Index is a cryptocurrency index launched by CoinMarketCap (CMC), one of the most popular crypto token data services providers. For context, the CMC’s altcoin index tracks the market performance of alternative crypto tokens (altcoins).
Accordingly, CoinMarketCap clarifies those tokens that are not monitored in the index. “Remember, stablecoins like Tether and DAl, as well as asset-backed tokens such as WBTC, stETH, and cLINK, aren’t included,” said the crypto data service provider.
Components of the CMC’s Altcoin Index
Now, the index tracks the performance of the top 100 altcoins by market capitalization. As CoinMarketCap states, “The index uses the top 100 coins ranked on CMC (excluding stablecoins and wrapped tokens) and compares them based on their rolling 90-day price performances.”
To clarify, the 90-day tracking period denoted a quarterly rebalancing weighted by individual tokens market capitalization. Other similar indices include the CMC Bitcoin Index, CMC Cryptocurrency Index, etc.
With CMC’s Altcoin index, a benchmark is provided to assess the entire altcoin market. Following this assessment, crypto investors can track altcoin market trends, and optimize their portfolios accordingly while making informed investment decisions.
The Index Predicts Altcoin Season
As stated by CoinMarketCap, “If 75% of the top 100 coins outperform Bitcoin in the last 90 days, it’s Altcoin Season.”
The platform goes on to describe the characteristic market conditions of Altcoin Season, a period when altcoins gain more dominance (evidenced by increasing market cap) in the crypto space.
Meanwhile, these coins gain such market dominance from sudden price surges that dwarf the progress of Bitcoin and other tokens exempted from the Altcoin Index.
Furthermore, the bullish trend during Altcoin Season boosts investor sentiment which drives more investment in crypto tokens, creating a feedback loop that drives the bullish season. Notably, investors who take advantage of this season make significant and sometimes, exponential returns on investment.
Consequently, CMC’s Altcoin Index is sometimes referred to as CMC’s Altcoin Season Index as it heralds each Altcoin Season.
For more information on the Altcoin Index, visit CoinMarketCap.